Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions. Date Activities Units Acquired at Cost Units Sold at Retail January 1 Beginning inventory 700 units @ $50 per unit February 10 Purchase 300 units @ $46 per unit March 13 Purchase 100 units @ $40 per unit March 15 Sales 780 units @ $70 per unit August 21 Purchase 110 units @ $55 per unit September 5 Purchase 570 units @ $52 per unit September 10 Sales 680 units @ $70 per unit Totals 1,780 units 1,460 units Required: 1. Compute cost of goods available for sale and the number of units available for sale. 2. Compute the number of units in ending inventory Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. (For specific identification, units sold consist of 700 units from beginning inventory, 200 from the February 10 purchase, 100 from the March 13 purchase, 60 from the August 21 purchase, and 400 from the September 5 purchase.) Compute the cost assigned to ending inventory using FIFO. (Round your average cost per unit to 2 decimal places.) Compute the cost assigned to ending inventory using LIFO. (Round your average cost per unit to 2 decimal places.) Compute the cost assigned to ending inventory using weighted average. (Round your average cost per unit to 2 decimal places.) Compute the cost assigned to ending inventory using specific identification. (For specific identification, units sold consist of 700 units from beginning inventory, 200 from the February 10 purchase, 100 from the March 13 purchase, 60 from the August 21 purchase, and 400 from the September 5 purchase.) Compute gross profit earned by the company for each of the four costing methods. (Round your average cost per unit to 2 decimal places.) The company’s manager earns a bonus based on a percent of gross profit. Which method of inventory costing produces the highest bonus for the manager?
Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions.
| Date | Activities | Units Acquired at Cost | Units Sold at Retail | ||||
|---|---|---|---|---|---|---|---|
| January 1 | Beginning inventory | 700 | units | @ $50 per unit | |||
| February 10 | Purchase | 300 | units | @ $46 per unit | |||
| March 13 | Purchase | 100 | units | @ $40 per unit | |||
| March 15 | Sales | 780 | units | @ $70 per unit | |||
| August 21 | Purchase | 110 | units | @ $55 per unit | |||
| September 5 | Purchase | 570 | units | @ $52 per unit | |||
| September 10 | Sales | 680 | units | @ $70 per unit | |||
| Totals | 1,780 | units | 1,460 | units |
Required:
1. Compute cost of goods available for sale and the number of units available for sale.
2. Compute the number of units in ending inventory
Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. (For specific identification, units sold consist of 700 units from beginning inventory, 200 from the February 10 purchase, 100 from the March 13 purchase, 60 from the August 21 purchase, and 400 from the September 5 purchase.)
Compute the cost assigned to ending inventory using FIFO. (Round your average cost per unit to 2 decimal places.)
Compute the cost assigned to ending inventory using LIFO. (Round your average cost per unit to 2 decimal places.)
Compute the cost assigned to ending inventory using weighted average. (Round your average cost per unit to 2 decimal places.)
Compute the cost assigned to ending inventory using specific identification. (For specific identification, units sold consist of 700 units from beginning inventory, 200 from the February 10 purchase, 100 from the March 13 purchase, 60 from the August 21 purchase, and 400 from the September 5 purchase.)
Compute gross profit earned by the company for each of the four costing methods. (Round your average cost per unit to 2 decimal places.)
The company’s manager earns a bonus based on a percent of gross profit. Which method of inventory costing produces the highest bonus for the manager?
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